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The Economics of Democracy in Muslim Countries

by Saliba Sarsar and David B. Strohmetz
Middle East Quarterly
Summer 2008, pp. 3-11


Last year was a tumultuous one for democracy in Muslim-majority countries. On July 22, 2007, despite Turkish military warnings three months earlier about the danger to secularism posed by the impending election,[1] the Islamist Justice and Development Party (Adalet ve Kalkinma Partisi—AKP) won the Turkish parliamentary elections, leading Prime Minister Recep Tayyip Erdoğan to proclaim "democracy, security, and stability" to be the real winners."[2] Then, on November 3, 2007, General Pervez Musharraf declared a state of emergency in Pakistan, suspending the constitution. Shortly after, assassins gunned down Benazir Bhutto, the leading secular oppositionist. Such events demonstrate not just the fragility of democracy in Muslim countries, but the complicated role that the military plays in such states—sometimes as a protector of secularism, but frequently, as an enforcer of the power of anti-democratic regimes.

Democracy in Muslim Countries

Whether religion impedes democracy in majority Muslim countries remains the subject of academic and policy debate.[3] Yet such discussion seldom recognizes the influence that factors external to Islam, such as demography, economics, and militarization, have on the fragile existence of democracy in Muslim countries (where it exists at all). Understanding the role of such variables can help policymakers better promote democracy in such societies.

The Organization of the Islamic Conference (OIC), an intergovernmental organization representing the majority of Muslim states, provides a useful pool to study. Only 48 of the 57 states that comprise the OIC and which account for 1.1 billion out of 1.5 billion Muslims worldwide, however, provide the data necessary to calculate the status of democracy; the other nine simply do not collect sufficient data.[4] These span several regions, including 18 states in the Middle East and North Africa; 15 in sub-Saharan Africa; 11 in Asia beyond the Middle East; 2 in southeastern Europe; and 2 in South America. They have an average per capita gross domestic product (GDP) of $5,746; an average, official unemployment rate of 15.44 percent (for countries with unemployment data); and a military expenditure as percentage of GDP of 4.93 percent (see Table 1).

The Status of Democracy Index (SDI) measures each country's progress toward democratic governance through multiple variables. First, it measures governance through four variables: how heads of state and members of the legislature are selected; political party development; suffrage; and the maturity of civil liberties. Second, it incorporates the annual Freedom House survey to quantify media freedom.[5] Third, it uses U.S. State Department reports to measure religious liberty.[6] The fourth variable incorporates ratings of human rights from the State Department and prominent nongovernmental organizations (NGOs) such as Amnesty International and Human Rights Watch.[7] Fifth, it uses the United Nations Development Program's index to provide a measurement of human development.[8] And lastly, the Heritage Foundation's index of economic freedom quantifies economic freedom.[9]

The Status of Democracy Index rates each of these nine variables on a three-point scale: 0 (nonexistent), 1 (emerging), or 2 (fully present). Some of the variables, such as media freedom, religious liberty, and respect for human rights, are easy to quantify, whereas measuring human development is more subjective. Economic freedom can be scored on the level of governmental interference in the economy: 0 (strong), 1 (moderate), and 2 (low). It is then possible to convert the totals to a percentage for ease of digestion.[10]

Table 2 shows the forty-eight Muslim countries ranked in order of their placement on the Status of Democracy Index, ranging from fully functioning democracy (75-100th percentile) and partial democracy (50-75th percentile) to partial autocracy (25-50th percentile) and strong autocracy (0-25th percentile). Only three of these countries—Mali, Guyana, and Suriname, together representing less than 1 percent of the Muslims present in the survey group—are considered full democracies. The rest of the countries in the index are considered partial democracies or partial autocracies, with four countries—Chad, Pakistan, Saudi Arabia, and Uzbekistan, together representing almost 20 percent of the population—being full autocracies.

As the Status of Democracy Index shows, democracy in the Middle East and North Africa is the exception rather than the rule. Lebanon and Turkey, each with a 61 percent score, rank the highest. Only Algeria (52.7 percent) and Egypt (50 percent) score in the upper two quadrants. In descending order, the rest of the Middle East and North African countries are: Jordan (47.2 percent), Tunisia (47.2 percent), Yemen (47.2 percent), Kuwait (44.4 percent), Morocco (44.4 percent), Syria (36 percent), Qatar (33.3 percent), Bahrain (30.5 percent), Libya (27.7 percent), Oman (27.7 percent), Sudan (27.7 percent), United Arab Emirates (27.7 percent), Iran (25 percent), and Saudi Arabia (13.8 percent).

Guns and Butter

Countries must determine how much of their money to spend on guns—order and security—and butter, that is, spending that enhances social harmony and economic prosperity. The Status of Democracy Index score serves to illustrate the guns versus butter dilemma. The forty-eight Muslim countries were divided into four quadrants based on the median split of their GDP per capita and the percentage of GDP spent on the military. The mean Status of Democracy Index score was then calculated for each group (see Table 3).

The countries that were above the median for military expenditures as a percentage of GDP had a significantly lower Status of Democracy Index score after taking the countries' GDP into account for their GDP grouping. The mean Status of Democracy Index score for the countries above the median for military expenditures was 9.2; the Status of Democracy Index score for the countries below the median for military expenditures was 6.8. There was no statistical difference between the high and low GDP groups for the Status of Democracy Index score after controlling for their military expenditure grouping. The overall mean Status of Democracy Index score for the high GDP group was 7.9; the overall mean Status of Democracy Index score for the low GDP group was 8.1.

Correlation analysis indicates:

  • The greater percentage of Muslims a country had relative to its overall population, the lower its SDI score tended to be.[11]

  • The higher a country's GDP per capita, the lower its SDI score.[12]

  • The greater percentage of a country's GDP that is devoted to military expenditures, the lower its SDI score.[13]

  • Because GDP and military expenditure percentages are positively correlated with each other,[14] a linear regression examined which of the two was a stronger predictor of SDI. The regression suggests that military expenditure percentage is most strongly related to the country's SDI after considering its GDP, not the reverse. The greater a country's military expenditure percentage, the lower its SDI.

  • The greater the percentage of Muslims within a country, the higher the percentage of the GDP that is devoted to its military expenditures.[15]

The data show that the percentage of GDP devoted to military expenditures seems most related to a country's SDI score. Countries above the median with respect to military expenditures had a significantly lower SDI, regardless of the GDP grouping. In addition, the correlation between SDI and GDP essentially disappears when considering military expenditures. Military spending predicts SDI after controlling for GDP; the reverse is not true.

The data also show some uniformity in two categories but variety in the other two. Three quarters of the countries grouped in the "high GDP/high military" category are located in the Middle East and North Africa, and most of their governments, whether secular or religious, are authoritarian. In contrast, three quarters of countries grouped in the "low GDP/low military" category are found in sub-Saharan Africa. Four out of seven of the countries in the "low GDP/high military" group are members of the Arab League with three located in the Middle East and the fourth in the Horn of Africa. The other three are in southeastern Asia, southern Asia, and central Asia, respectively. As for the seven countries with "high GDP/low military," only Tunisia is a member of the Arab League and the remaining countries are located in southeastern Europe, western Africa, northern South America, central Asia, and southeastern Asia.

Military Regimes and Muslim Democracy

Militarization is certainly not the only hindrance to the advancement of democracy in Muslim majority countries, but it is an important factor—especially in countries that have sufficient financial resources to turn their military, police, and intelligence forces into powerful, anti-democratic players in society. Although a country's wealth can ostensibly be used for the kind of spending that encourages the economic health of average citizens—such as investment in education and infrastructure programs—it seems that in many Muslim majority countries, this wealth is used to augment military and police power in order to suppress enemies of the regime, both internal and external. Countries in the "high GDP/high military" group have historically allowed the armed forces and intelligence services to play crucial roles in politics and society.

Examples abound: The Algerian army terminated elections in 1991 to prevent the Islamic Salvation Front from taking power. Eight years later, it enabled Abdelaziz Bouteflika to win the presidency. Following the 9-11 attacks and the subsequent war on terrorism, the governments of Egypt, Sudan, and Syria used their military and police forces to bolster their internal control. In Saudi Arabia, the military has been the backbone and main defender of the Islamist Wahhabi regime. Religious leaders in Iran use the military to ensure their own domination over society. 

For both secular and religious regimes, there is a congenital problem of democracy being sacrificed in favor of the pragmatic desire on the part of leaders to remain in power. In 1992, U.S. Assistant Secretary of State for Near Eastern Affairs Edward P. Djerejian highlighted this dilemma: "We are suspect of those who would use the democratic process to come to power only to destroy that very process in order to retain power and political dominance. While we believe in the principle of ‘one person, one vote,' we do not support ‘one person, one vote, one time.'"[16]

This has been the key problem for both religious and secular regimes in Muslim countries: how to justify their legitimacy without surrendering power or submitting themselves to the kind of democratic practices that might end up forcing them to surrender power. In Iran, for example, conservative clerics exercise ultimate power and repress reformers and behavior deemed "un-Islamic." Haleh Esfandiari, an Iranian-American academic and the director of the Middle East Program at the Woodrow Wilson International Center for Scholars, and Robert S. Litwak, director of the Division of International Studies at the Woodrow Wilson International Center for Scholars, have urged caution when promoting democracy in Iran. They argue that such U.S. pressure generates paranoia in the leadership, provides an excuse for political and cultural repression, and encourages the subversion of the indigenous reform movement.[17] In Turkey, where Islam and democracy have coexisted, there are few impediments to the AKP's consolidation of power beyond the military as secular parties have been unable to mount a strong challenge for six years.

While substantial investments in the armed forces are negatively associated with democratization, these forces are major employers in some Muslim countries and, thus, enhance economic growth and social development. Moreover, in order to generate some political participation, whether the result of acquiescence to democratic ideals or external pressure, authoritarian and military leaders have allowed mainstream Muslim candidates to compete in local and national elections, enabling them to make gains in Bahrain, Egypt, Morocco, and Turkey.

Oil or gas revenues have pushed more than half of the Muslim majority countries—the Persian Gulf states especially—into the "high GDP/high military" category where they are able to afford both guns and butter. An economy that is based almost entirely on oil revenue can be a very prosperous one, but it can also make a country vulnerable to aggression and conflict. Kuwait was attacked and overrun by Iraqi forces in August 1990 but was liberated in four days by a U.S.-led U.N. coalition in February 1991. Kuwait then spent more than $5 billion to repair the damaged oil infrastructure. Securing energy resources often leads countries to militarize and enter into strategic alliances, sometimes sidetracking the pursuit of democracy. For example, the Gulf Cooperation Council (GCC)—consisting of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates—was established in 1981 to strengthen regional security and improve economic, military, and political cooperation. The GCC's fear of attack by a regional power, such as Iran, combined with the U.S. interest in having GCC countries support the moderation of both political forces in the Middle East and the oil market contribute to the strong U.S. presence in the Persian Gulf.

Significant levels of oil and gas revenue have not contributed to the good fortune of countries like Pakistan, which fall into the "low GDP/high military" category and now face major security challenges from Islamists. Here, though, successive U.S. administrations have compensated for high military expenditures with billions in aid.[18] While Muslims have criticized the U.S. military agreements concluded with Persian Gulf states and Uzbekistan in the post-9-11 period, these accords have also generated more income, security, and control in those countries.

Even Indonesia—which sits in the "low GDP/high military" group, is home to the largest Muslim population in the world, and is blessed with large oil reserves and mineral resources—suffers from the burdens of foreign loans, natural disasters, and internal divisions that often require military disentanglement. Although Indonesia follows the Pancasila, a political ideology comprised of the belief in one God, humanity, the unity of Indonesia, democracy, and social justice,[19] Indonesian writer Ali Noer Zaman notes that "demands for the implementation of Shari‘a remain audible as many Muslim social organizations seek to integrate facets of Shari‘a by hiding them within an amendment to chapter 29 of the 1945 constitution, which says that the Muslim community should practice its religion fully and through local regulations."[20]

A different situation is occurring in countries with "low GDP/low military," whether they happen to be impoverished or wealthy. Compare, for example, impoverished Bangladesh and oil-rich, but mismanaged, Nigeria. In 1991, a national referendum enhanced parliamentary democracy in Bangladesh by limiting the influence of the executive branch and the armed forces and privileging the legislature. However, Bangladesh remains "mired in a struggle between competing visions of the future that retard its economic growth and progress and exacerbate the malaise of poor governance and widespread corruption. The confrontation between government and opposition plays out on the streets through frequent hartals (general strikes), which often result in political violence."[21] Nigeria, a federal republic, witnessed a peaceful transition from military to civilian rule in 1999, and the recent general election in April 2007, although flawed, represented the first civilian-to-civilian transition of power since the country's independence in 1960.[22]

Muslim countries with "high GDP/low military" have focused more on development and economic reforms than others, even though they face major challenges. For example, Albania, one of the poorest European countries, has managed to improve its customs and tax services and to modernize and liberalize its trade regime.[23] Malaysia has industrialized its economy and its "New Economic Policy" redistributed some wealth to the poorer classes.[24] In Tunisia, political stability and economic reform have made the country more attractive to international funding agencies although such success has come at the expense of human rights.[25]

High military expenditures in Muslim majority countries make the development of democracy difficult while low military expenditures in such countries promote democracy, provided the GDP remains high. Moreover, countries that spend a larger proportion of their GDP on military expenditures appear to be threatened by Muslim extremists. Whether the high military expenditures are a cause of or a reaction to problems with Islamists, though, remains unclear.

Policy Implications

Democratization is a generational initiative that must consider internal and external dynamics. There is, obviously, no magic formula. There are many Muslim communities, each with its own unique approaches—some entirely rejectionist, unfortunately—to nation-building and democracy. What Muslim leaders and peoples who wish to improve the democratic character of their societies can do for themselves is determine how best to improve their democratic practices and institutions and make them more attractive to those people and groups who are less inclined to support democratic transformation. What non-Muslim leaders and peoples can do is encourage and support Muslims as they speak out for equality, good governance, pluralism, and tolerance.

Muslim majority countries could benefit both from opening their political and socioeconomic systems to democratization and by reducing military spending. The United States, the European Union, and international financial institutions should encourage such countries to increase spending on the promotion of good governance, human development, and economic freedom, instead of augmenting their military arsenals. While self-defense and security are legitimate goals, the use of the police and military in trampling individual and political rights should not be encouraged. This suggests the need for security guarantees as ways to deter potential threats, lessen fears, generate mutual trust, and enhance stability—and thereby create the political space necessary for the promotion of democracy.

Saliba Sarsar is a professor of political science and associate vice president for academic program initiatives at Monmouth University. David B. Strohmetz is an associate professor of psychology and associate vice president for academic and institutional assessment at the same institution.

[1] Statement from the Turkish General Staff, Apr. 27, 2007.
[2] Today's Zaman (Istanbul), July 23, 2007.
[3] For a review of the Islamic democracy debate, see David Bukay, "Can There Be an Islamic Democracy?: Review Essay," Middle East Quarterly, Spring 2007, pp. 71-9; Saliba Sarsar and Alexander Keller, "Select Bibliography on Islam and Democracy," Middle East and Islamic Studies, Cornell University Library, Dec. 2007.
[4] Those that do not: Afghanistan, Comoros, Côte d'Ivoire, Iraq, Maldives, the Palestinian Authority, Somalia, Gambia, and Guinea-Bissau.
[5] "Press Freedom Rankings by Region 2005," Freedom of the Press (Washington, D.C.: Freedom House, 2005), accessed Feb. 5, 2008.
[6] International Religious Freedom Report, 2005 (Washington, D.C.: Bureau of Democracy, Human Rights, and Labor, U.S. Department of State, 2005), accessed Feb. 5, 2008.
[7] "Human Rights by Region: Middle East and North Africa," Library Online Documentation Archive, Amnesty International, New York, accessed Apr. 14, 2008; Amnesty International Defending Human Rights Worldwide—Middle East/N. Africa (New York: Amnesty International, 2006), accessed Apr. 14, 2008; "Country Reports on Human Rights Practices, 2005," Bureau of Democracy, Human Rights, and Labor, U.S. Department of State, Washington, D.C., accessed Apr. 14, 2008
[8] "Human Development Indicators," Human Development Report 2005 (New York: UNDP, 2005), pp. 219-22.
[9] 2006 Index of Economic Freedom (Washington, D.C.: Heritage, 2006), accessed Apr. 14, 2008.
[10] For further discussion of methodology, see Saliba Sarsar, "Can Democracy Prevail?" Middle East Quarterly, Mar. 2000, pp. 39-48; Saliba Sarsar, "Quantifying Arab Democracy," Middle East Quarterly, Summer 2006, pp. 21-8.
[11] Pearson r = -.34; this is a statistically significant correlation.
[12] Pearson r = -.29; this is a statistically significant correlation.
[13] Pearson r = -.36; this is a statistically significant correlation.
[14] Pearson r = -.43; this is a statistically significant correlation.
[15] Pearson r = .42; this is a statistically significant correlation.
[16] Edward P. Djerejian, "The US and the Middle East in a Changing World," address at Meridian House, Washington, D.C., June 8, 1992.
[17] Haleh Esfandiari and Robert S. Litwak, "Confronting Iran: How Promoting Democracy Can Backfire," The Chronicle of Higher Education, Oct. 19, 2007.
[18] Craig Cohen and Derek Chollet, "When $10 Billion Is Not Enough: Rethinking U.S. Strategy toward Pakistan," The Washington Quarterly, Spring 2007.
[19] General Achmed Sukarno, "The Birth of the Pancasila," speech to the Independence Preparatory Committee, Indonesia, June 1, 1945.
[20] Ali Noer Zaman, "Indonesia: Is Secularism a Choice?" Common Ground News Service, Oct. 23, 2007.
[21] A. Tariq Karim and C. Christine Fair, "Bangladesh at the Crossroads," United States Institute of Peace, Special Report 181, Jan. 2007, p. 2.
[22] "Nigeria, Failed Elections, Failing State?" Africa Report, no. 126, International Crisis Group, Brussels, May 30, 2007.
[23] Yiannes Zahariadis, "The Effects of the Albanian-EU Stabilization and Association Agreement: Economic Impact and Social Implications," Overseas Development Institute, London, Feb. 2007.
[24] Ioannis Gatsiounis, "Islam Hadhari in Malaysia," Current Trends in Islamic Ideology, Center on Islam, Democracy, and the Future of the Muslim World, Hudson Institute, Washington, D.C., Feb. 16, 2006.
[25] David L. Mack, "Democracies in Muslim Countries and the Tunisian Case: What Is Essential, What Is Nice, and What Works?" Middle East Institute, Washington, D.C., June 16, 2005.  

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